Supply Chain Disruption Week: Responsible Production and Consumption: Where are we?

As we look to the future and the looming triple threat posed by climate change, biodiversity loss and environmental pollution, it becomes increasingly clear that a fundamental transformation needs to take place in our economies and societies. Human well-being and equity and the welfare of our planet need to be at the heart of all policy decisions. As global citizens, sustainability must be our new mantra. The essence of Sustainable Consumption and Production (SCP) is “can we do more and better with less?” It aims to increase net welfare gains from economic activities along the whole production lifecycle by reducing waste, degradation and pollution.

The 2030 Agenda for Sustainable Development adopted by all United Nations Member states in 2015 provided a blueprint for a peaceful and prosperous future for the planet and its people. A key aim of the Agenda 2030, the Sustainable Development Goal 12 affirms that: “to ensure sustainable consumption and production practices necessarily entails to respect the biophysical boundaries of the planet and to reduce current global consumption rates in order to fit with the biophysical capacity to produce ecosystem services and benefits” (the United Nations Environment Program, 2020).

Unfortunately, the COVID-19 pandemic disrupted the progress being made towards achieving many of the Sustainable Development Goals (SDGs). Accordingly, the UN emphasised the need to design short term responses to mitigate the negative effects of the pandemic. As millions of people lost or left their jobs and lockdowns changed accessibility to consumer goods, consumption patterns changed drastically globally. The unanticipated increase in demand for medical-related products resulted in massive stock outs of these items. Agricultural and food industry supply chains were also disrupted.  The demand for fresh food on e-commerce platforms surpassed suppliers’ capacities to deliver. Supply chains responded by price increases as shortages of supplies and general logistic system issues became rampant.

Supply chain sustainability practices which were previously underutilised came into vogue as companies grappled with the challenges imposed by the disrupted supply chains. It became evident that sustainability must be integrated into supply chain design to secure long-term business resilience. COVID-19 has sorely tested the limits of business resilience worldwide, further highlighting the need to make supply chains more adaptable by adopting sustainability-oriented strategies. Firms are now taking important measures to audit and inculcate sustainability throughout all of their supply chain stages. Collaborative engagement of companies that are located upstream and downstream across entire supply chains are being used to foster community trust, reduce risk and build resilience.

As production networks became increasingly globalised and interlinked, clear frameworks for building sustainable supply chains were needed. The renewed focus on global environmental governance of supply chains gave birth to new global and local frameworks to ensure supply chains are responsible. In 2016, governments in more than 50 countries instituted regulations, guidance, standards and other policies to encourage or require sustainability reporting by organisations.  Researchers and global policy-makers are now tasked with devising strategies and policies that allow SDGs to be realised in a new post-pandemic world. Furthermore, the pandemic has shed light on how the complexity of global supply chains makes regions and countries vulnerable to shortages when crises hit. Africa’s heavy reliance on foreign trade partners was exposed as borders closed and lockdowns became the new normal in 2020 and 2021. Trade restrictions and cross-border blockages caused major disruptions that left African policymakers and leaders scrambling to find ways of building reliable and sustainable supply chains regionally and locally to shock-proof against future disruptions.

Indeed, many African governments are boosting local manufacturing capacity and promoting the use of local components to reduce the reliance on imported parts. These locally produced components can be traded regionally, which reduces supply chain disruptions in the face of global shocks. Africa has the potential to grow as a supply chain hub as manufacturing capacity, access to land and labour, reliable logistics and infrastructure improve over time. Domestic and regional policy changes will therefore play a crucial role in building resilient African supply chains.

Additionally, leveraging information technology and digitalization is a promising avenue that can improve visibility and accountability in African manufacturing and production processes. Improving inventory control can reduce working capital and downtime in the production cycle. Digitization will also impact how companies manage supplier relationships, logistics and shipping processes. Companies are turning to data-driven solutions with artificial intelligence (AI) to identify risks, bottlenecks and underperformance in their supply chains. COVID-19 has also catalysed the adoption of 3D technologies, remote work collaboration and employment of geospatial analytics to pre-empt risk management and suppliers across the ecosystem. There has been a greater focus on localization of supply chains and smart manufacturing to meet local demand.

Following the pandemic, the heightened focus on sustainability and environment, social and governance (ESG) issues in trade transactions and investor and customer relations has paved the way for a more integrated, sustainable and collaborative approach to trade. ESG-focused investors are taking advantage of Africa’s continent-wide free trade area and advocating for sustainable consumption and production processes to be embedded in existing supply chains.

Sustainable Consumption and Production entails the promotion of resource and energy efficiency, development of sustainable infrastructure, facilitation of access to basic services, increasing employment and improving the quality of human life. It contributes to the realisation of development plans, the reduction of environmental and social problems, strengthens economic competitiveness and reduces poverty. SCP requires a systemic approach and involves all the actors operating in a supply chain, from producer to final consumer. These stakeholders include; business entities, consumers, policy makers, researchers, scientists, retailers, media and development partners. All parties must be educated on sustainable consumption and sustainable lifestyles.

Unsurprisingly, the sustainability imperative is being driven by consumers. Consumer empowerment and education will ensure that informed purchases are being made and that manufacturers remain accountable. Indeed, some businesses have reengineered their inbound and outbound logistics for procurement, transportation, inventory control and other logistical functions to meet new customers’ sustainability requirements. This dyadic interaction between companies and consumers will help co-create an environmentally responsible consumption ecosystem.

While supply chains have been weakened after the global pandemic, many effective treatments for their repair are underway. Sustainability-oriented strategies can strengthen supply chain competitiveness and resilience in the long run, thereby improving economic performance and improving quality of life. By allocating resources towards implementing new methodologies, techniques, tools, standards and policies, African companies can invest in building their resilience and increase net welfare gains throughout the ecosystem. The devastating global fires, floods and droughts that came on the heels of the pandemic should serve as a wake-up call. As African citizens, we must exercise our personal influence to build a better future for ourselves and the next generation by demanding that businesses play a positive role in society. Let us hope that the global ‘eco-wakening’ wave will help us to collectively take the right action, change our relationship with nature and protect the planet we call home.

Article de Shailja Sharma, Executive Fellow et coach

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